Kinetic Catalyst urges Marin Software to pursue sale process
In a regulatory filing, Kinetic Catalyst Partners disclosed a 5.1% stake in Marin Software and sent a letter to the company's board saying the "best course of action" is to sell the company. "Given what we believe is the complete failure of the CEO to even remotely meet his own predictions, we have awaited action by the board," the letter reads. "Inexplicably, the action the board has recently taken is to reward the management team with stock options, RSUs, and golden parachute agreements. These are assets of shareholders being given to a failed management team by an outside board that has never invested in the stock. We believe the best course of action is to sell the company. The company's largest holder, ESW Capital, has acquired over 60 software companies. Their ownership would seem to be a natural starting point for an open and competitive sales process. Alternatively, if the board does not wish to pursue a sales process, we believe the board would best serve shareholders by voluntarily reconstituting the board with representatives of outside shareholders. Four outside shareholders own 45% of the company and have zero board representation. The one course of action completely unacceptable is to stay the course. We believe the existing management team and board will destroy remaining shareholder value through continued destruction of the balance sheet and top line revenue."